What is an RIA?

Jan 12, 2024

Financial planning

What is an RIA?
What is an RIA?

Hi there, money experts in the making. There are too many acronyms in the world of personal finance and investing. And if you’re trying to figure out what RIA stands for, you’ve come to the right place.Today we’ll dive into:

 

  • What is an RIA in plain English?

  • What does fiduciary mean?

  • What are RIAs required to do?

  • How do RIAs make money?

  • Who uses RIAs to manage their investments?

 

What does RIA stand for and what does it mean?

 

RIA stands for registered investment advisor. Think of RIAs like financial player-coaches, pros who specialize in managing other people's money and teaching you right now. Plenty is an RIA and although we don’t wear capes, you can trust that we’ve got your back.

 

At its core, an RIA is a government-regulated firm tasked with providing investment advice and can manage client portfolios. These firms can be as small as a one-man band or a large entity with thousands of employees.

 

RIAs must be registered with either federal and/or state authorities, adhere to SEC regulations, and operate under a fiduciary standard (more on that fancy word below).

 

Historically, RIA clients were typically just high-net worth individuals. The fee structure didn’t make sense otherwise. Fortunately, new pricing models and service options have expanded the outreach and client base of many RIAs.

 

How many RIAs are there?

 

Hold onto your hats. There are over 451,000 registered RIA firms in the US according to the Investment Adviser Association.

 

What does fiduciary mean?

 

Fiduciary simply means that RIAs are obligated to act in their clients’ best financial interests and not maximizing their own profits. Fiduciary responsibility is a good thing--like having a money superhero who's always got your back.

 

What does that involve? To act in their clients’ best financial interests at all times, RIAs need to make decisions that are as accurate as possible based on available data and are aligned with the clients’ agreed-upon objectives. They also have to disclose any conflicts of interest upfront and maintain a reasonable basis for advice.



Also, if an RIA ever fails to adhere to its fiduciary duty, the SEC can take enforcement actions against it.

 

How and where are RIAs registered?

 

RIAs have to register with either the Securities and Exchange Commission (SEC) or their local state authority. During this process an RIA has to document details on their investment styles, past disclosures, client assets under management, fee structures, and any potential conflicts of interest.


RIAs who manage $100 million or more or do business in 15 or more states must register with the SEC. Smaller RIAs only have to register with their local state agency.


What’s great for investors is that these government agencies regularly examine RIAs to make sure they’re following all the rules and meeting their fiduciary duties.


You can also search for RIAs by name on the SEC website. Check us out here.

 

How do RIAs make money?

 

RIAs primarily earn money with the management of their clients’ investment portfolios.

 

Usually, they earn fees that are based on a percentage of the money they're managing for you. And guess what? There are no sneaky commissions or transaction fees to worry about. RIAs align their success with that of their clients like you. It's a win-win.

 

While the average RIA fee hovers around 1.17% of AUM, the range is usually between 1% to 3% (Source: Forbes Advisor, 2023). 


Recently, alternative fee structures are being offered by more RIA firms to make their services more affordable to a broader range of people. Some examples of newer pricing models include fixed fees for specific services, hourly rates, or charging an annual retainer. Greater flexibility makes partnering with an RIA easier than ever.


At Plenty, we believe building wealth shouldn't be a luxury that only the already wealthy can afford. The Plenty investment platform brings affordable access to everyday households.


Plenty charges an annual membership subscription fee of $200 per couple and an investment management fee (0.2% cash management or 0.4% next gen roboadvisor). 


What are RIAs required to do?

 

RIAs need to stay in compliance with all of the regulations of the SEC or their state agency.


This includes the registration process, transparent disclosure of conflicts of interest, being able to prove investments were suitable and risk was disclosed, and more. 

 

Who uses RIAs to manage their investments?

 

At first, RIAs were just for the wealthy. But as startups take on the industry, services are becoming increasingly affordable for everyday families. So, whether you've got a mountain of cash or a molehill, there’s likely an RIA able to help.


If you want personalized and comprehensive financial advice for your investments, an RIA could be just what you’re looking for. 


They can help you create custom portfolios with anything from single-name stocks, to bonds, ETFs, and mutual funds. Interested in eco-investing or crypto stocks? An RIA can help you find investments that best suit all of your financial goals and interests.

 

How is an RIA different from a financial planner?

 

While both RIAs and financial planners operate in the financial advisory sphere, there are some differences between the two. 


Think of RIAs as investment gurus who want to help you grow your wealth. They’re focused on managing your money, investment portfolios, and asset growth. RIAs specialize in investment management, but some also offer advice in broader personal finance areas such as retirement planning and estate planning.


Financial planners are like your financial BFFs. They cover everything from planning your retirement to saving for your kid's college fund. Financial planners who are not RIAs, can help you create a plan, but won’t help you actually invest. In other words, RIAs can do both financial planning and investment management, but planners can’t do both–they can only do financial planning.

 

How Plenty can help

 

And there you have it. Registered Investment Advisors are like the financial wizards you never knew you needed. They're on a mission to help you grow your cash, and with their fiduciary magic, you can trust they’ll have your back.


Whether you're a finance novice or a seasoned investor, we here at Plenty are here to help you on your journey to financial awesomeness.


Plenty has all the tools you need to plan, invest, and track your savings. We help you achieve your goals as quickly and easily as possible, so you’ll be ready for anything life has in store. 


Sign up for an account with Plenty today.


- Team Plenty


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This information is for general informational purposes only. It is not intended to constitute investment advice or any other kind of professional advice and should not be relied upon as such. Before taking action based on any such information, we encourage you to consult with the appropriate professionals. We do not endorse any third parties referenced within the article. Market and economic views are subject to change without notice and may be untimely when presented here. Do not infer or assume that any securities, sectors or markets described in this article were or will be profitable. Past performance is no guarantee of future results. There is a possibility of loss. Historical or hypothetical performance results are presented for illustrative purposes only.




Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.


Brokerage services are provided by Atomic Brokerage LLC "Atomic Brokerage", member FINRA and SIPC. Clearing and custody services are provided by Brokerage firm BNY Mellon Pershing, member SIPC. Plenty Financial RIA, LLC has a relationship with Atomic Brokerage to manage and execute investments on behalf of customers. Subadvisory services are offered through Atomic Invest LLC ("Atomic Invest"), an SEC-registered investment advisor, member SIPC. Atomic Invest was formerly known as Helium Advisors LLC.


Return data used in the interactive tool are hypothetical performance data which contains inherent limitations and is not a substitute for actual investment returns derived from a live portfolio. There are numerous risk factors related to trading and markets which cannot be fully accounted for when depicting Hypothetical Performance. Consequently, future returns are not guaranteed, and a loss of principal may occur. THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information.


By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. No act of downloading or otherwise copying from this site will transfer title to any software or material at this site to you. Anything that you transmit to this site becomes the property of Plenty, may be used by Plenty for any lawful purpose, and is further subject to disclosure as deemed appropriate by Plenty, including to any legal or regulatory authority to which Plenty is subject. Plenty reserves all rights with respect to copyright ownership of all material at this site, and will enforce such rights to the full extent of the law.


Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.


Brokerage services are provided by Atomic Brokerage LLC "Atomic Brokerage", member FINRA and SIPC. Clearing and custody services are provided by Brokerage firm BNY Mellon Pershing, member SIPC. Plenty Financial RIA, LLC has a relationship with Atomic Brokerage to manage and execute investments on behalf of customers. Subadvisory services are offered through Atomic Invest LLC ("Atomic Invest"), an SEC-registered investment advisor, member SIPC. Atomic Invest was formerly known as Helium Advisors LLC.


Return data used in the interactive tool are hypothetical performance data which contains inherent limitations and is not a substitute for actual investment returns derived from a live portfolio. There are numerous risk factors related to trading and markets which cannot be fully accounted for when depicting Hypothetical Performance. Consequently, future returns are not guaranteed, and a loss of principal may occur. THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information.


By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. No act of downloading or otherwise copying from this site will transfer title to any software or material at this site to you. Anything that you transmit to this site becomes the property of Plenty, may be used by Plenty for any lawful purpose, and is further subject to disclosure as deemed appropriate by Plenty, including to any legal or regulatory authority to which Plenty is subject. Plenty reserves all rights with respect to copyright ownership of all material at this site, and will enforce such rights to the full extent of the law.


Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.


Brokerage services are provided by Atomic Brokerage LLC "Atomic Brokerage", member FINRA and SIPC. Clearing and custody services are provided by Brokerage firm BNY Mellon Pershing, member SIPC. Plenty Financial RIA, LLC has a relationship with Atomic Brokerage to manage and execute investments on behalf of customers. Subadvisory services are offered through Atomic Invest LLC ("Atomic Invest"), an SEC-registered investment advisor, member SIPC. Atomic Invest was formerly known as Helium Advisors LLC.


Return data used in the interactive tool are hypothetical performance data which contains inherent limitations and is not a substitute for actual investment returns derived from a live portfolio. There are numerous risk factors related to trading and markets which cannot be fully accounted for when depicting Hypothetical Performance. Consequently, future returns are not guaranteed, and a loss of principal may occur. THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information.


By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. No act of downloading or otherwise copying from this site will transfer title to any software or material at this site to you. Anything that you transmit to this site becomes the property of Plenty, may be used by Plenty for any lawful purpose, and is further subject to disclosure as deemed appropriate by Plenty, including to any legal or regulatory authority to which Plenty is subject. Plenty reserves all rights with respect to copyright ownership of all material at this site, and will enforce such rights to the full extent of the law.